Now that high school seniors have made their commitment to the school of their choice for this fall, I thought I would cover some upcoming changes to college planning. There are many new financial aid rules that will go into effect as a result of the Consolidated Appropriations Act (CAA), 2021 which contains provisions that expand those provided by the Coronavirus Aid, Relief, and Economic Security (CARES Act).

One of the biggest results of the CAA includes changes to the Free Application for Federal Student Aid (FAFSA), which is completed by prospective and current college students each academic year to determine their financial aid eligibility. The new provisions will show up on the 2022 FAFSA and take effect for the 2023-2024 academic year, which gives the U.S. Department of Education time to implement the changes.

Some of the changes that are scheduled to take place include the following:

The number of questions will be reduced from 108 to about 36.

Currently, in a two-parent household, either parent can complete the FAFSA. However, if the parents are divorced or separated, the custodial parent is required to fill out the FAFSA. The custodial parent is defined as the parent with whom the child lives for the majority of the 12-month period ending on the day the FAFSA is filed. A big advantage of this is that if the custodial parent is the lower wage earner, then only that parent’s income and assets will be counted for financial aid purposes.

The new legislation will require the parent who provides the most financial support to complete the FAFSA, instead of the custodial parent. In cases in which the support provided is 50/50, it defaults to the parent or household with the highest adjusted gross income (AGI).

Untaxed income and benefits have been streamlined to include only deductions and payments to retirement plans listed on the federal tax return. Annual child support received is no longer categorized as untaxed income, but rather as an asset.

There are several changes to the Income Protection Allowance (IPA). The number of children in college will not reduce the allowance. The IPAs in 2023-24 are set to increase over 2021-2022 amounts by 20 percent for parents; 35 percent for dependent students, independent students without dependents, and married students with dependents; and 60 percent for single independent students with dependents.

Currently, financial aid eligibility increases for families with more than one child enrolled in college at the same time. So, parents with twins/multiples or parents whose children are spaced closer together have had the potential to benefit greatly. However, under the new legislation, the FAFSA will no longer provide this discount.

This change will reduce financial eligibility for families with more than one child enrolled in college at the same time. For example, prior to the change, a family with a calculated EFC of $20,000 could see that drop by as much as 50 percent if they had two children in college — that would mean an EFC of $10,000 per child. Without this discount, the calculated EFC would be $20,000 per child.

Students will no longer lose eligibility for a prior drug-related conviction or for not registering with the Selective Service. As a result, those questions will be removed.

The term Expected Family Contribution (EFC) will now be known as the Student Aid Index (SAI). The EFC is an index number that colleges use to determine a family’s eligibility for financial aid. The term has often been misleading and confusing to families, as it implies that it is either the amount of money a family will have to pay for college or the amount of aid they will receive.

The EFC (soon to be SAI) is based on several factors, including income, non-retirement assets, education savings account(s), household size and marital status to name a few. Many middle- and high-income-income families pay more than the EFC because schools rarely provide an aid package that meets 100% of financial need.

Changes in how cost of attendance is defined. This includes many changes that have become necessary in the wake of COVID-19, such as allowing all students (not just those enrolled half-time or more) to be reimbursed for computing expenses, splitting room-and-board expenses to more accurately account for how much is spent on each, an increase to housing allowances and clarification of how they are calculated.

The biggest source of financial aid comes from the federal government, and the majority is awarded through the Pell Grant Program. It is the main federal grant available to low- and middle-income families. The new legislation simplifies Pell Grant eligibility by ensuring that families that make less than 175% of the federal poverty level will receive the maximum award, which is $6,345 for the 2021-22 school year. The bill also increases the maximum amounts by $150, thereby bringing the maximum award to $6,495.

It is important to note that, with a new presidential administration, which means a new Secretary of Education, there could still be more changes. Stay tuned!

Take advantage of Michigan College Planning’s College Planning workshops to learn more about how to reduce stress, save time and potentially money during the college planning process.

Visit or locations and dates.

The workshops are informative and include steps you can take right now to assure you understand the cost of attendance and how you can afford college. If you are unable to attend a workshop, feel free to call Michigan College Planning with your questions.

Vicki L. Beam is a college planner at Michigan College Planning located in Traverse City. She encourages questions and comments about future columns. Contact Michigan College Planning at (231)947-0203, by email at and at

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